What is Scope 3 calculation and reporting?
The Greenhouse gas (GHG) emissions of a company chain can be classified into three scopes. Scope 1 and Scope 2 cover direct emissions and emissions related to purchased energy, whereas Scope 3 calculations cover indirect emissions that originate in the companies’ upstream and downstream value chain. This includes activities such as purchased goods and services, transportation and distribution, product use, waste disposal, and employee commuting. In total, there are 15 mutually exclusive categories (see figure below) of Scope 3 emissions which are defined in the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (also referred to as the Scope 3 Standard). This Scope 3 standard provides requirements and guidance for companies to calculate and publicly report a GHG emissions inventory for their Scope 3.
Scope 1, Scope 2 and Scope 3. Adapted from the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard
Why is Scope 3 calculation important?
Scope 3 calculation and reporting can be a valuable tool for companies that want to take responsibility for the carbon footprint of their entire value chain, rather than just their direct emissions. It helps companies to set up effective data management systems, and develop a baseline for setting and tracking emission reduction targets. As a further step, companies are able to identify opportunities to reduce emissions and thereby improve their sustainability performance, as well as that of their products and services. This can result in cost savings, added value, and improved reputation. By working closely with upstream suppliers and downstream stakeholders, companies can build stronger relationships and promote sustainability throughout their value chain. Finally, Scope 3 calculation and reporting can help companies to meet regulatory requirements and stay ahead of emerging sustainability trends and best practices.
The Scope 3 calculation and reporting process in practice
In practice, the process of calculating Scope 3 emissions involves several steps. First, a screening step should be performed to identify which categories of emissions from the Scope 3 standard are most relevant in the company’s value chain. Then, for each of the relevant categories, a data collection and reporting approach must be chosen, taking into account both the feasibility and credibility of the results. The data collection is often a company-wide effort, involving a range of departments such as procurement, finance, HR and sales. It is likely also to benefit from engaging with suppliers and customers to gather data on their own processes and related emissions. Once the data has been collected, the overall carbon footprint of each relevant category can be calculated and reported using the defined reporting approach.
How Ecomatters can support with Scope 3 calculation and reporting
At Ecomatters, we provide businesses with a comprehensive approach to calculating Scope 3 emissions and doing Scope 3 reporting. We offer a wide range of services, from developing GHG inventories and management plans to providing guidance on the implementation and tracking of GHG reduction initiatives. We provide expertise in the development of GHG accounting and auditing systems to ensure accuracy and reliability. We understand that every business is different and we strive to provide tailored solutions that meet the individual needs of our clients.
Because of the complexity of the reporting requirements and dependency on external data, the Scope 3 calculation process can be more challenging than Scope 1 and 2 reporting. We have 10+ years of experience with quantitative calculations, reporting standards, environmental databases, and data collection and management systems. This has enabled us to develop accurate and effective Scope 3 reporting systems for many international organisations. Contact us today to learn more about how we can support your company.
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